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Background

Common carrier law establishes, among other things, that the carrier is not liable for the contents of the goods carried. Common carriers have historically come in many flavors: roadhouses (hotels), trucks, trains, telegraph networks, postal services, and telephone networks. These common carriers had a special relationship to the public. They served the public without discrimination - a carrier would not generally be liable for that third party. Postal services are not liable for the contents of the letters carried. Telephone services are not liable for the communications transmitted. Trains would not be liable if the passenger transported happened to be the notorious Red Baron.

Communications common carriers (aka telephone networks or historically Ma Bell) are regulated under the Communications Act of 1934. [Title 47 United States Code] In the communications context, Internet networks are not common carriers and are not regulate by the FCC. This created a tension. Internet networks looked, tasted, and smelled like classic common carriers, transporting goods without ownership of or responsibility for the goods transported. But Internet networks did not wish to be considered common carriers in the communications context. This has led to a schizophrenic legal approach that has addressed the liability of networks on a case by case basis, avoiding any classification of common carriage. Congress has consistently concluded that Internet networks should not be liable for the third party content that they carry. The Communications Decency Act created a defense to liability for third party content in the context of liable and defamation. Legislative proposals with regard to Internet gambling generally provide a defense to prosecution for networks that merely provide access to content including Internet gambling without being responsible for that content. And the Digital Millennium Copyright Act created defenses to liability for third party content where ISPs comply with certain provisions of the DMCA.

This has created an interesting dichotomy where, with regard to the content transmitted, ISPs are essentially common carriers; with regard to the communications networks, ISPs are not common carriers.

In the world of copyright, the first legal Internet conflicts were marked by anxiety. Cases began to find ISPs liable as contributors to copyright infringement. ISP trade associations (i.e., CIX) became anxious to find legislative solutions that would protect ISPs. Content owners, who were having business plans disrupted by the information revolution, likewise became anxious to find some measure to curtail the global copying machine known as the Internet. Content owners, unable at times to reach out and touch alleged infringers, saw ISP networks as potential pinch points that could be attacked. Congress, which finds itself able to act on intellectual property concerns with a degree of speed and efficiency not found on other public policy concerns, brought the Digital Millennium Copyright Act (DMCA) to life.

The Digital Millennium Copyright Act was born out of World Intellectual Property Organization treaties in 1996. These new laws are designed to revise intellectual property in the digital age. [Ellison 1076 (9th Cir. 2004); [Aimster] [Universal City Studios 440 (2nd Cir. 2001). In an attempt to implement the treaties, the DMCA places notice-and-take-down obligations on ISPs, makes it a crime to circumvent technologies used to protect intellectual property, and establishes royalty payments for webcasters (over the Internet "radio" stations). Dropped from the draft legislation was database protections.

DMCA

A problem of content in the digital era is that it is not always possible to identify those responsible for alleged infringement. Even where it is possible, it is not always possible to impact their actions through legal process (they may originate from a foreign jurisdiction or they may have as an ephemeral presence as whack-a-mole). In between the copyright owner and content poster lies the Internet Service as a pinch point. While the poster may be hard to reach out and touch, the Internet service might not.

The DMCA creates a process, more akin to a dance, between copyright holders, Internet networks, and third party content posters when an allegation of infringement is made. Copyright owners received the notice-and-takedown dance for removing pirated content from the Internet. In return for being willing to be caught in the crossfire of a copyright dispute, service providers received immunity from possible copyright infringement liability. [Harlan] [Napster] [Title II of the DMCA, the Online Copyright Infringement Liability Limitation Act] [S. Rep. No. 105-190 at 2 (1998)]

Limitations - Sound Recordings Prior to Feb. 15, 1972

There is disagreement among the courts as to whether the DMCA covers sound recordings prior to February 15, 1972. Capitol Records, Inc. v MP3tunes, LLC (821 F Supp 2d 627 [SD NY 2011]), (DMCA embraced sound recordings fixed before February 15, 1972, "there is no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post—1972 recordings." ).The Court in Capital Records stated:

"the DMCA was enacted to clarify copyright law for internet service providers in order to foster fast and robust development of the internet. Limiting the DMCA to recordings [fixed] after 1972, while excluding recordings before 1972, would spawn legal uncertainty and subject otherwise innocent internet service providers to liability for the acts of third parties. After all, it is not always evident ... whether a song was recorded before or after 1972.'" (quoting Capitol Records, Inc. at 642)

But Compare UMG Recs. Inc. v. Escape Media Group, Inc., 2013 NY Slip Op 2702 - NY: Appellate Div.,1st Dept. April 23, 2013 (Copyright law, therefore DMCA, does not cover sound recordings prior to February 15, 1972).

Federal Copyright Protection for Pre-1972 Sound Recordingspdf, A Report of the Register of Copyrights, p. 130 (Dec. 2011)

Application of the DMCA “Safe Harbor” of 17 U.S.C. § 512

One court has ruled that section 512 currently applies to pre-1972 sound recordings. However, the ruling in Capitol Records, Inc. v. MP3tune s was made on highly questionable grounds. 479 The text of section 512(c) states that a “service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storag e at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider” if the service provider complies with a number of requirements. 480 The court in MP3tunes stated that “[t]he text of the DMCA limits immunity for the ‘i nfringement of copyrights’ without drawing any distinction between federal and state law.” 481 The court in MP3Tunes made this determination despite the fact that section 301(c) states “[w]ith respect to sound recordings first fixed before February 15, 1972, any rights or remedies under th e common law or statute of any State shall not be annulled or limited by th is title until February 15, 2067.” 482 The court in MP3Tunes correctly observed that “section 301(c) does not prohib it all subsequent re gulation of pre-1972 recordings.” 483 However, its conclusion that Congress di d in fact subsequent ly regulate pre-1972 sound recordings in section 512(c) is difficult to square.  

Section 512(c) does not include any provis ion explicitly limiting remedies available for owners of pre-1972 sound recordings. Instead , section 512(c) refers to “infringement of copyright” 484 which is defined in section 501(a) as the violation of “any of the exclusive rights of the copyright owner as provided by sections 106 through 122.” 485 The fact that the term “infringement of copyright” only refers to infri ngement of rights protected under title 17, and does not include infringement of rights protected under common law or statute of any State, could not be more clear. The statute’s plain text reveals a narrow definition of “copyright infringement” which is buttressed by the la nguage of section 301(c). The court in MP3Tunes concluded that such a narrow reading would be at variance with the policy of the DMCA as a whole and would “spawn legal uncertainty” and that therefore such an interpretation should be rejected. However, the court in MP3Tunes did not offer any evidence that Congress intended section 512(c) to apply to pre-1972 sound recordings.

The court in MP3tunes not only ignored the plain text of the statute, it also ignored the general rule of statutory construction that exem ptions from liability, such as those established in section 512(c), must be construed narrowly, “and any doubts must be resolved against the one asserting the exemption.” 486 Furthermore, the court’s interpretation of section 512(c) runs afoul of the “cardinal rule” of statutory construction th at one section of a statute cannot be interpreted in a manner that implicitly repeals another section. 487 In light of these rules of statutory construction, any exemption of liability for viola tions of rights under the common law or statute of any State for pre-1972 sound recordings must be explicit in its intent to override the provisions of section 301(c).

The Office observes that numerous other limita tions and exceptions in Title 17, including those in sections 107 and 108, are also express limitations on the right to recover for “infringement of copyright.” 488 Yet none of these exceptions in the federal copyright statute has ever been applied directly to any claims under st ate law. In short, it is for Congress, not the courts, to extend the Copyright Act to pre-1972 sound recordings, both with respect to the rights granted under the Act and the limitations on those rights (such as section 512) set forth in the Act.

Sec. 230 Communications Decency Act

If the DMCA does not apply to sound recordings prior to Feb. 15, 1972, it is because the federal copyright law does not apply. If federal copyright law does not apply, then state copyright law does apply. This, then, leads to the question of whether Sec. 230 of the Communications Decency Act prevents liability by online service providers for violations of state copyright law. The Register of Copyrights Report provides the following analysis:

Federal Copyright Protection for Pre-1972 Sound Recordingspdf, A Report of the Register of Copyrights, p. 134 (Dec. 2011)

It is not settled whether the CDA limitations on liability apply to claims under state law that may arise from violation of the rights of owners of pre-1972 sound recordings, or whether such claims arise from a “law pertaining to inte llectual property” and are thus outside the CDA liability limitations. The U.S. Court of Appeals for the Ninth Circuit, in Perfect10, Inc. v CCBill, LLC , held that the carve-out from the immunity provided in the CDA for laws pertaining to intellectual property applies only to federal inte llectual property, and that therefore the CDA provides immunity for claims under state laws prot ecting intellectual property. The court stated that while the scope of federal intellectual prope rty law is relatively well-established, state laws protecting “intellectual property” (including trademark, unfair competition, dilution, right of publicity and trade defamation) are by no mean s uniform. The court concluded that any interpretation of the CDA that failed to immuni ze Internet service providers from claims arising under these diverse state laws would undermine C ongress’s goal of fostering the development of the Internet. Perfect 10, Inc. v. CCBill LLC , 488 F.3d 1102, 1118-19 (9th Cir. 2007).

Several other courts have declined to fo llow the reasoning of the Ninth Circuit in Perfect10 v CCBill, concluding instead that the CDA provides no immunity from claims under state laws protecting intellectual property. See, e.g., Universal Commun. Sys. v. Lycos, Inc. , 478 F.3d 413 (1st Cir. 2007); Atlantic Recording Corp. v. Project Playlist, Inc. , 603 F. Supp. 2d 690 (S.D.N.Y. 2009); Doe v. Friendfinder Network, Inc. , 540 F. Supp. 2d 288 (D.N.H. 2008). In Doe v. Friendfinder Network, Inc. , the District Court for the District of New Hampshire noted that prior to the Perfect 10 decision, the general consensus was that the CDA did not shield ser vice providers from state intellectual property law. See Friendfinder Network, Inc. , 540 F. Supp. 2d at 301-02 Both the Friendfinder Network decision and Atlantic Recording Corp. v. Project Playlist, Inc. criticized the Ninth Circuit’s failure to analyze the text of the statute. See id. ; Project Playlist, Inc. , 603 F. Supp. 2d at 703. The Project Playlist decision noted that the approach taken in Perfect 10 v. CCBill LLC appeared to be inconsistent with Ninth Circuit precedent gove rning statutory interpretation. See Project Playlist, Inc. , 603 F. Supp. 2d at 703. The courts in both Project Playlist and Friendfinder Network found that the language of the statute itself does not suggest that the carve-out from immunity in the CDA applies solely to federal intellectual property law, noting that Congress’s use of the modifier “any” in setting forth which laws pertaining to intellectual property were to be carved out from the CDA immunity provisions does not suggest a limitation to federal intellectual property law. On the contrary, the modifier “any” constitutes expansive language and there is no indication that Congress intended a limiting construction. See id. ; Friendfinder Network, Inc., 540 F. Supp. 2d at 301-02.

No stakeholders specifically addressed the possible application of the CDA to the state law protection of pre-1972 sound recordings. However, there is little question that if pre-1972 sound recordings were brought under federal law, they would be excluded from the CDA. And as a matter of policy, that is the correct result. Congress properly determined that Internet service providers should not receive the CDA’s more comprehensive immunity with respect to infringement of copyrighted works, but should be subject to the more limited safe harbor of section 501. Pre-1972 sound recordings should be tr eated no differently in this respect than post- 1972 sound recordings, or any other works of authorship .

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